Lone Star in renewed attempt to sell German bank IKB, say sources: Reuters

U.S. buyout group Lone Star is launching a fourth attempt to sell German corporate bank IKB, one of the highest-profile German casualties of the financial crisis, several people close to the matter said.

After failing to find a buyer for the lender in three previous auctions, the investor has tasked a new advisor – Citi – with evaluating the options for the bank which specialises in offering financial services for medium-sized German companies, the sources said.

The process of gauging interest among potential buyers is poised to start shortly, they added.

IKB may fetch around 500 million euros ($534 million) or about half of its book value, one of the sources said, while other people said IKB’s real value was hard to judge due to warrants held by debtors.

Some assets such as IKB’s leasing unit may be excluded from the sale, the first source added.

Lone Star and Citi declined to comment.

IKB, which was delisted last year, as of September 2016 had 18 billion euros in assets and posted a net profit of 10 million euros in the first six months of its fiscal 2016/17.

It had required several bailouts from German development bank KfW and the German state after its off-balance sheet investment vehicles ran into funding problems in 2007.

Following the rescues, IKB was taken over by KfW, which sold it to Lone Star in August 2008 for 137 million euros.

By late 2012, IKB had returned the last of the 12 billion euros in state guarantees it received from Germany’s bank bailout fund during the crisis.

In 2014, Lone Star tried to find a buyer for the bank. But the results from a European Central Bank stress test, which IKB barely passed, deterred buyers at the time.